It may not be the sexiest of subjects, but anyone who works in direct response marketing needs to know about data protection.
Why? Because it’s entirely possible that, within two years, we’ll see changes in the law that could fundamentally impact how businesses and brands communicate with their current customers and the way in which cold acquisition campaigns are run.
In January 2012, the European Commission announced plans for a comprehensive reform of the data protection law, primarily because the current 1998 law pre-dates the online and social media boom. It claimed this will increase individuals’ control of their personal data and reduce costs for businesses. Debates aside, businesses should be addressing the practical effects these changes may have on the way we, as marketers, run campaigns. The key issues revolve around the idea of consent.
Under current legislation, consent is based on an opt-out for direct mail and telephone marketing, whereas for email and SMS it’s opt-in. The direct mail opt-out is one of the reasons why you’re allowed to communicate freely with as many prospects and warm customers by post as you see fit. It’s also the reason why there is such a universe of third-party data volumes available for advertisers. Under the proposals, all marketing consent would become opt-in.
So, what could this mean? For cold acquisition there could be a huge loss of volume for third-party lists. Where would we find new customers, if such a mainstay of acquisition is dramatically reduced? We may become unable to contact our own customers because they’re less likely to give explicit consent under the new laws.
A secondary effect will be on data profiling. Currently, you don’t need to gain consent to carry out profiling. Under the proposals, we may need explicit consent - an actual opt-in to allow companies to use customers’ details in profiling. Thirdly comes the idea to classify IP addresses as personal data. Digital campaigning and web analytics could be severely restricted under these rules - to the point of being useless.
Now, on the face of it, restricting profiling and IP address tracking seems ridiculous, given how crucial they are to improving consumer interaction with brands. And, given the central place that digital now occupies in our strategies, you may wonder how worried do we need to be? A problem we face is uncertainty. Estimates are that the regulations, in whatever form, will be passed in early 2015 and come into force sometime in 2017. But this isn’t set in stone.
No-one yet knows what the final proposals will look like. The legislators are currently on their third version of the original text, having made amends to the previous two, with delays at each juncture. But it’s not all doom-and-gloom - there are signs that the proposals may not be as aggressive as originally proposed.
Out of the three groups to have viewed and written versions of the text, the current group (Justice and Home Affairs Ministers) are the one most likely to consider business interests. For example, there are discussions taking place right now regarding how direct mail communications will be approached and whether they will continue under the current opt-out law if deemed to be a “legitimate business interest”.
But, as the issue continues to be debated in the corridors of power, us humble marketers must search for alternative ways of communicating with customers in preparation for the numerous eventualities that could befall us. For example, you can test marketing methods that gain a consent as part of the acquisition process – present your prospects with an offer that’ll make them want to give you explicit consent. The main thing is to be prepared - one way or another, change is coming.